Sunday, 30 December 2012

So what,
then, is the alternative? So far I have examined, dispassionately I hope, the
flaws in capitalism as well as its attractions. Schweickart’s fundamental claim
– the point of After Capitalism – is
that TINA is a self-imposed intellectual constraint. There is a feasible alternative, a different economic system that
substantially reduces or eliminates capitalism’s flaws without replacing them
with more virulent pathologies.

This is not
a magical transformation, an instant gateway into nirvana. Problems will not
miraculously disappear, says Schweickart, “but intractable problems will become
tractable”.

He calls
this alternative model “Economic Democracy”, which I will refer to as ED for
short. Wage labour will be abolished for most enterprises (small businesses
like restaurants will be excluded). Most enterprises will be run democratically
through one member, one vote and general assemblies of all employees. This is
in contrast to the hierarchical, capitalist manner in which employees are hired
and are simply tools of production.

“When you join [a firm under ED] you receive the rights of
full citizenship; you are granted an equal voice, namely, an equal vote in the
community,” writes Schweickart. And you get an equal share of the profits made.

Some form of economic democracy,
as an alternative to capitalism, has attracted a growing number of advocates
recently, including Richard Wolff, Dan Hind, and even Lenin’s Tomb
blogger and SWP member, Richard Seymour.

This is not what has traditionally
been thought of as socialism. There is no central planning or state control of
the commanding heights of the economy in Schweickart’s conception of economic
democracy, though he still describes it as socialism. “Economic democracy is a
decentralized market economy,” writes Schweickart. “There is no central
authority dictating consumption, production or employment.”

If anything, ED is reminiscent of
syndicalism, which had its heyday
before the First World War.

In many ways, ED is rapidly
crystallising into the post-Communist and post-social democracy alternative to
dysfunctional capitalism. So in analysing and criticising Schweickart’s ED
model, I’m also looking at this larger trend.

The best
way to do this is to revisit the flaws of capitalism, outlined in parts 2.1 and
2.2 and see how, if at all, economic democracy will remedy them. And them to
look at the question of markets. Can a non-capitalist market work? Is this
really a cure for capitalism, or just capitalism in another form?

1 Inequality

Inequality
is an intractable problem of capitalism. It is acute and worsening. Schweickart’s ED seems to attack
this problem at source and very effectively. The Mondragon collective of
co-operatives in Northern Spain, which
Schweickart repeatedly cites and says is of “world historical” importance, has
a rule that the pay ratio between the highest and lowest paid, should not exceed 6.5-1. By
comparison, the pay ratio in Anglo-Saxon corporations is, on average, more than
300-1.

It is
possible that scarcity of certain skills and the cultural influence of senior
managers, which in grossly magnified in current society, could expand that
ratio even under system of economic democracy. But, as a remedy for inequality,
ED is far more persuasive than currently touted “solutions” such as a high pay
commission and workers represented on remuneration committees.

Cure for Capitalism rating: 8 out of 10

2 Lack of meaningful democracy

Schweickart
says that, under capitalism, we live in polyarchies.There are free elections and a choice of candidates, but not
real democracy.

ED would
fairly obviously enhance and render meaningful democracy, because it would be
applied to the one huge area where it is commonly now banished: the work-place.
When a person joins an enterprise under ED, they become a citizen not merely an
employee.

The
democratic advantage of ED over central planning socialism is that it is
decentralised. Employment is not monopolised by one entity, the state, with
lethal consequences for democracy and freedom of expression.

But
Schweickart also advocates social control of investment. The destination for
new investment, 10 to 15% of GDP, would not be decided by banks, stock markets or boards
of directors, but by public meetings, open to everybody. This democratic
control of investment plays a similar role that participating budgetingdoes for public spending. In this
way, the public would be able to influence the pattern of consumption and the
way society develops, beyond the limited and skewed capitalist of way just
voting with their feet or wallets.

Another
democratic enhancement of ED is that, because huge profits do not accrue to
small minorities of wealthy people and large corporations, the political system
would not be perverted by the influence of money. Against this, it should be
remembered that even worker-directed firms have interests which may conflict
with those of the wider community. The “red priest”, José María Arizmendiarrieta, who founded the
Mondragon co-op movement, warned of the danger of co-operatives becoming
“collective egoists” (which Schweickart quotes in After Capitalism). So the problem of lobbying and the pursuit of
institutional selfishness are not banished by ED.

Also, ED does not
affect wider political decisions and how these are made. ED enshrines direct
democracy in the realm of the enterprise where people spend their working
lives. But, by definition, it is silent about the wider political realm.

Cure for Capitalism rating: 6.5/10

3 Environmental degradation

The environmental
flaw in capitalism is that it grows, exhausting natural resources and causing
poisonous side-effects of production, such as carbon emissions. At first
glance, it is difficult to see how ED would be any different. Enterprises
would, as Schweickart freely concedes, compete for market share and to satisfy
their consumers. The difference, he argues, is that worker directed enterprises do not have the
same growth dynamic as their capitalist counterparts. A capitalist company
exists to maximise profit, but an economic democracy enterprise exists to
secure profit per worker. As result ED enterprises are less likely to seek
growth because profit will have to be shared among a growing work-force. A bog standard
capitalist company does not have the same internal limit to growth because
workers are merely a tool of production, and do not receive profits.

As a
consequence, ED firms are compatible with low or zero growth, says Schweickart.

The other
way in that ED is less harmful to the environment is that new investment is
more geographically spread out. Money for new investment is generated by a tax
on all enterprises, which is distributed to regions on a per head basis, a
method Schweickart calls “social control of investment”. At present, capital
and thus jobs, concentrate in certain areas (such as London
in the UK) creating mega-cities and putting
an intolerable strain on the surrounding environment. The same damaging
concentration of people and resources would not occur under ED.

I can see
Schweickart’s arguments but I’m not completely convinced that ED enterprises
would so readily eschew growth. I have to conclude, with regard to
environmental degradation, case unproven. For example, it has been argued by
another economic democracy advocate, Richard Wolff, that worker self-directed
enterprises would not pollute because the workers would suffer from the results
and they won’t want to harm themselves or their families. But what about
pollution, such as carbon emissions, whose effects may be felt on the other
side of the world? It’s also apparent that enterprises in a market seek growth,
not just to maximise profit, but also to head off competition and protect
market share. This condition applies to worker directed enterprises, as much as
their capitalist equivalents.

Cure for Capitalism rating: 5.5/10

4 Unemployment

This is a
distinctly mixed picture. Under ED there is no desire or need for unemployment
to discipline the workforce, no requirement for a reserve army of the
unemployed. If anything, the opposite is true. A prime aim, says Schweickart,
of ED is the creation of employment, whereas under capitalism, it is merely a
by-product. Job creation is an explicit goal of the Mondragon collective of
cooperatives in the Basque country, which Schweickart believes, demonstrates
how a non-capitalist economy can work.

In fact,
says Schweickart, there is an intrinsic bias against employment in capitalism.
Capitalist enterprises are more inclined to replace workers with machines
(partly because payroll taxes fall on each individual worker, whereas under ED
they would be replaced with an enterprise tax) in order to maximise profit. ED
enterprises, more dedicated to securing durable employment, would be less prone
to mechanisation. But this in itself creates a looming problem. Because ED
enterprises aim to create employment, they would be more likely to not develop
or even suppress technologies that render labour redundant. In this way society
would artificially hold back the development of technology for the sake of
preserving paid jobs.

Not only is
this, like King Canute trying to hold back the tide, impossible, it tries to
defer facing how society is going to deal with the fact that in the future
there will simply be less demand for labour because of the advance of
technology. We can’t all, nor should we, all have 5 day a week jobs. In 1930,
John Maynard Keynes believed that in a century’ time, people would work 15 hour weeks. Schweickart simply does not deal with this issue and I believe it is a
major lacuna in his alternative model. The absence of a central authority, or a
corrective to the free workings of markets, just incubates a vast problem.

In short,
ED does deal with the problem of capitalist unemployment but in a way that
generates problems of its own.

Cure for Capitalism rating: 5/10

I realise
this is already quite long. So, for those that are following this saga, I will
write the final part soon and examine whether ED can eradicate capitalist instability
and overwork. And then consider the broader question of markets.

I was going
to include a clip of Schweickart speaking but I’ve run out, so this will have
to do.

Sunday, 16 December 2012

It’s an
amazing state of affairs when you stop and think about it. Almost everyone in
the West enjoys lives which would be envy of any Roman Emperor or Pharoah of
ancient history, remarks John Lanchester, in his book about the financial
crisis, Whoops! Whether we appreciate it or not, we live in the
best societies that have ever existed.

Because of
our wealth, we are the most fortunate humans that have ever lived, says
Lanchester.

Do you feel lucky,
punk?

Anti-austerity
journalist Polly Toynbee was a mere seven years ago eulogising current society
as an overlooked golden age. There has never been a better time to be alive,
she said, despite the mood of pessimism. Supermarkets were “modern miracles of
splendour and choice … Unimaginable luxuries and choices are now
standard - mobile phones sending pictures everywhere, accessing the universe on
the internet and iPods with all the world's music in your ear.”

In previous centuries, most children died before they
reached maturity, epidemics and malnutrition were rife, most people did not
survive past forty and women bore so many children, they were used up and
exhausted by their thirties.

Larry Elliot, economics editor of the Guardian newspaper,
recently told the same story in economic terms. “Before new and more efficient
production methods for agriculture and industry were developed in the 18th
century, per capita incomes in the west had risen at a glacial pace for more
than 1,000 years,” he wrote. “Modern industrial capitalism generated surpluses
and it was this that differentiated it from the subsistence model.”

Is not, therefore, modern industrial capitalism responsible
for our “unimaginable luxuries” and the blessings of wealth? Should we not be
thankful?

“The reality of the world resists us”

If you are searching for a reason why a pervasive sense of
dissatisfaction has not led to a more widespread alienation from capitalism, I
think it’s because of an unconscious fear of killing the troublesome goose (and
its incurable troubles were laid bare in Parts 2.1 and 2.2) that lays the golden
eggs.

As an example, take foreign holidays. More and more people,
and young people in particular, experience them as a matter of course. In the
1970s neoliberal think-tanks in the UK asserted that secretaries flying
off on holiday to the Greek islands was a standing refutation of the Left. In
the film La Guerre Est FinieYves
Montand, a Spanish Communist, says, “14 million tourists vacation in Spain every
year. The reality of the world resists us.”

Here is the appeal of capitalism in all its seductive glory,
its ability to achieve technological advancement and satisfy consumer desires.
Yes the same ability is inescapably linked to its faculty to eat up resources
and destroy the natural environment. Capitalism's failings may bring it down and
“us with it” said investment manager Jeremy Grantham last year.

Consumerism was and still is the glue that binds people most
tightly to the system. Everyone, says US economist Richard Wolff, from
economists, to advertisers, business, the media but also trade unions and left
movements bought into this idea. Modern economics was built on the assumption
that labour was the burden for which consumption, enabled by wages, was the
compensation.

Rising wages became the gold standard for what they could
buy but consumerism has been entrenched at the expense of other, possible
advancements of human freedom and welfare. Roads, not less traveled, but not
traveled at all. Wolff describes consumerism as a deal. Though he is speaking
of the US,
what he says is true of any western country.

“The deal might have collapsed at any time if US workers
rebelled against the organization of production in the US. This could
have occurred if rising wages did not suffice to make them ignore the growing
inequality of US life, or if they rejected subordination to ever more
automated, exhausting work disciplines, or if they refused to deliver ever more
wealth to every fewer corporate boards of directors of immense corporations
ever further removed from them in power, wealth and access to culture.”

Of course, now, one part of the consumerist deal – rising
wages – is falling apart. The golden age seems definitely over. Young people
may be able to fly to Barcelona
but they are also sinking further into debt to in order to pay for the
education to get jobs that don’t exist.

Yes the glue has retained most of it stickiness up to now.

You can’t always get what you want

But I want to argue that capitalism’s ability to deliver
utility, to provide satisfaction to consumers – the choice of multi-national
food, the EasyJet flight to Prague
for the cost of a pub lunch is (setting aside externalities like climate
change) more than matched by its capacity to create dis-utility. And both come
from the same source.

It’s almost a truism to note, although still worth noting,
that capitalism’s ability to satisfy consumer desire is a by-product. “It is
not from the benevolence of the butcher, the brewer or the baker that we expect
our dinner, but from their regard to their own interest,” said Adam Smith. You
are not given the choice to buy a new Smart Phone by the pure, unadulterated
desire of Apple to enhance human communication, but by that corporation’s need
to make a profit.

But, just as intrinsic to capitalism, although less
frequently observed, is that it is an accumulative
system. “Every year,” writes David Schweickart, “enormous quantities
of commodities are produced that, when sold at anticipated prices, generate
enormous profits, a large fraction of which are reinvested back into the
economy in anticipation of still greater production and still more profits.”

For capitalism to function
smoothly, this money must find somewhere to go. That it can’t find somewhere to
go – corporations in the UK
are sitting on £750bn – is one reason why it’s not functioning smoothly. But
the use and re-use of money is at the heart of capitalism. That’s why it’s
called capitalism – money becomes capital by virtue of the fact that it is
employed to make more money. This explains why it grows but also why there is
unrelenting pressure to find outlets for investment. An alternative name, given
by one economist to capitalism,is
'the profits system'.

There is no conscious choice in
this. It is why Apple don’t respond to consumer desires so much as think of
products and then try to get consumers to want them (which they seem to be very
good at. Steve Jobs, said one journalist “anticipated technological desires you
didn’t even know you had”). The idea of
voluntary choice is the basic error of writers like Lanchester. He argues that,
despite the credit crunch, he could discern no general desire to slow down.
Actually I think this desire does exist but it can’t be translated into
tangible action.

If you feel like you are on a
treadmill, that’s because you are.

I can’t get no satisfaction

This inherent characteristic of
capitalism, its machine-like ability to create profit which then needs to be
re-invested to create more money, explains why it manufactures dis-utility as
much as utility.

The credit crunch and subsequent
economic depression are a prime example of dis-utility. Banks seeking profits
lent to consumers who eventually couldn’t pay back. Those same banks created
asset-backed securities as a means of making more money, thus spreading the
credit crunch around the world. “The crisis was generated by the system
itself,” in George Soros’ words. The same system that generates Tesco and Ryan
Air.

The fact that now many businesses
cannot get credit from the institutions – banks – that in any rational economic
arrangement are supposed to supply credit as a matter of course, is another example of mammoth
dis-utility.

In other words, public services
should provide an outlet for the investment of private funds.

That this will create spiraling
dis-utility is shown by recent history. In Britain, the Private Finance
Initiative has seen new hospitals built by private companies, which they then
own. It has resulted, on average, in a 30% drop in the number of beds in PFI hospitals compared
to ordinary public hospitals. Thus, there has been a large increase in the
‘through-put’ of patients using the reduced number of beds, a major cause of
the spread of the lethal MRSA virus. Capitalism in health services has resulted
in mammoth dis-utility for “consumers” of hospital services, as well as being more
expensive for the taxpayer.

The management theorist, Peter
Drucker said in 1939 that the Great Depression revealed capitalism as a system
that didn’t serve any purpose but it’s own. That is becoming increasingly
apparent again.

Virtuous consumerism

Is it possible to have an economic
system that does not spurn consumer desires as inherently worthless and
strives, within reason, to satisfy them, but one that avoids the glaring
systemic flaws and downsides of capitalism?

David Schweickart would say that
you can – through a largely market economy made up of worker, not capitalist,
controlled enterprises. He argues you can have a market without that becoming a
capitalist market and that makes all the difference in the world. But thinkers
throughout history, from Aristotle to Karl Polanyi and Murray Bookchin, have
criticised markets as inherently destructive of human solidarity and the
environment, and the ‘market economy’ is frequently used as a synonym for
capitalism. It is to this question of markets, good or bad, that we turn in the
last part of this review.

Wednesday, 28 November 2012

Welcome to
Part 2.2 of your quick guide to capitalism and its ruinous consequences. I can
see the next immutable feature of capitalism itching to reveal itself so let’s draw
back the curtain and begin …

Unemployment

Yes,
welcome unemployment. Or perhaps not. Full employment, as Schweickart says, is,
outside of wartime, a textbook fantasy. The guilty secret is that unemployment
is desired by the rulers of our society. Full employment leads to large wage
rises (a seller’s market), which eat into profit as well as causing inflation,
as the much lower unemployment rates in the 1960s and ‘70s, showed. Capitalists
know this and they want the discipline of potential unemployment so employees
are never completely secure in their jobs. “Economics is the method,” said
Margaret Thatcher. “The object is to change the soul.”

But there
is another reason for unemployment which Schweickart doesn’t talk about.
Regardless of its usefulness in disciplining workers, there is a structural reason for unemployment. The
Conservatives in Britain
have made immense political capital from proclaiming the existence of a
‘structural deficit’ – government over-spending that is over and above the
extra spending resulting from the economic downturn. But they – and all
mainstream political parties – are silent about the structural character of
much unemployment – the joblessness that would be there even without a
recessionary economic climate. This is a feature they can never admit.

In the UK, from
1950-73, unemployment averaged 1.6%. Post-1980 it has averaged 7.8%, and
frequently been higher. Even at pre-crisis levels, unemployment was high enough
to have fatally wounded governments in the ‘60s and ‘70s. Now it is seen as
fact of life, when in reality, it is a fact of capitalism. John Maynard Keynes
spoke about technological unemployment as early as the 1930s, and technological
development, spurred on by the desire to reduce costs and increase profit, has
rendered, under this system, a
significant proportion of the population economically superfluous.

The
economist Harry Shutt has written about this systemic problem.The
scarcity of the means of subsistence, he says, has greatly diminished since the
Industrial Revolution, but the scarcity of work opportunities has
correspondingly grown. “Yet it remains true,” he writes, “that for the vast
majority of the world’s people the sale of their labour is their only potential
source of income”.

The Obama
economic adviser, Laurence Summer, has said that high levels of unemployment
are now a structural feature of the US economy, regardless of the
presence or absence of economic crisis (which seems to be the new normal
anyway). “No matter how hard we try, the current economic system needs fewer
and fewer of us,” says the writer Dan Hind.

The
structural nature of unemployment results in a situation where a majority of
people work very hard, but a significant minority don’t work at all, or are
under-employed, and live in
poverty. The employed are employed because they contribute to profit, the
remainder do not. Under capitalism, employment largely depends, not on meeting
social needs, but being needed to generate profit. A great many jobs are, under
any rational judgement, socially useless.

Overwork

Here we
confront a paradox of the system. Capitalism is technologically prolific. It
produces a wondrous variety of commodities and this explains a large part of
its appeal, an attraction we will consider in the next part. But the
technological advances the system makes, while theoretically reducing the need for toil and promising to ‘save
labour’, actually makes work more intense.

“A visitor from another planet
would be perplexed to discover that in a purportedly free and rational society
there are millions of people who want to work more, living in close proximity
to millions who want to work less,” writes Schweickart. “The visitor would be
even more perplexed to learn that new technologies allow us to produce ever more
goods with ever less labour, and yet the intensity of work – for those who have
work – has increased.”

In 1999, research by the Joseph Rowntree Foundation found
that nearly two-thirds of British workers had experienced an increase in the
speed or intensity of work over the previous five years.

Some great minds of the recent past thought that
technological advance would have precisely the opposite effect. John Maynard
Keynes believed that people in the first half of the 21st century
would work 3 hour days and fifteen hour weeks. Keynes, one of the most famous
economists in history, was grossly mistaken.

According to the theory of conventional economics if people
desire more leisure, they will automatically get what they want, trading income
for more free time (Conventional economics is all about desire – if you want a coffee-maker
the market will provide one). But, in practice, it doesn’t work like that. Work
hours are set, or implicitly set because they are required to get work done and
employees can rarely negotiate more leisure, despite the rhetoric of ‘work-life
balance’.

The reason, as Schweickart points out, is that consumption
is the lifeblood of business but leisure is often its antithesis. “Any kind of
cultural shift that emphasizes leisure over consumption bodes ill for
business,” he writes. “To be sure individual businesses [like an airline]
catering to the increase in leisure that people would have might profit, but if
this leisure comes at the expense of income, overall aggregate demand will
fall, profits will decline, the economy will stagnate or slip into recession.”

It can be argued that overwork is not an immutable feature
of capitalism. Work hours declined, because of government and trade union
action, in the latter part of the nineteenth and for much of the twentieth
century. In France,
a 35 hour week was introduced in 2000. Theoretically, the EU has a 48 hour week.
But these external restraints on capitalism have proved very hard to make
stick. The French 35 hour week has been incrementally eaten away at since its
introduction.

Instability

This last feature is not one included by Schweickart,
although in the latest edition of After
Capitalism, which I don’t have, there is a section on instability.

Anyway, capitalism is a peculiarly unstable economic system,
and its instability is generated internally, not by uncontrollable outside
factors. All the talk pre-2007 about an “end to boom and bust”, “the Great
Moderation” and the “Goldilocks’ economy” (everything just right, not too hot
or too cold), proved to be errant propaganda. In the UK, prior to the Great Recession,
there were two severe economic downturns in the last thirty years (1980-82 and 1990-92).
Millions of people were made unemployed, thousands of business collapsed, home
repossessions and evictions soared. And now this.

Ha-Joon Chang in 23
Things they don’t tell you about Capitalism has shown that the number of
countries experiencing a banking crisis shot up after the beginning of the
1980s. 20% of countries experienced a banking crisis in the mid nineties, and
35% did following the 2007-8 global financial crisis.

If, for whatever reason, investors lose confidence, says
Schweickart, they will stop investing, businesses will stop selling goods and
the economy will slump. What we are experiencing now is a chronic loss of
confidence in the ability of businesses to sell products as shown by enormous pile
of money, estimated at £750bn in the UK, that corporations are sitting on and not using.

Keynesian economists, Chang included, would argue that,
while instability is a feature of capitalism, it can be overcome. Restraints on
finance and banking, exchange controls which don’t allow capital to leave
countries, and encouraging labour to receive more of a share of profits, can
achieve this. The economist Hyman Minsky said in 1982: “The most significant economic event of the era
since World War 2 is something that has not happened: there has not been a deep
and long-lasting depression.” But actually, the Keynesian era did end in a
recession, in 1974. So Keynesianism was not able to eradicate capitalist
instability.

The
consequences of this recurring instability can be seen in interrupted careers,
destroyed relationships and life chances, evictions, home repossessions, and
social unrest. The economic historian Karl Polanyi, writing during the Second
World War, described capitalism’s strange ability to create “unheard of material
welfare” but a simultaneous “catastrophic dislocation of the lives of
the common people”.

The systemic instability of capitalism is the cause of the current and prolonged
economic downturn and government budget deficits. “Capitalism went into the toilet”
is how the American economist Richard Wolff expressed the situation in very
technical language. It is not the result of poor people being profligate,
immigrants, government over-spending, the EU (although the Euro may have
exacerbated the problem) or selfish human nature in general. But while
capitalism is the cause that cannot be seen as the cause, for the consequences
of that cause and effect equation are unacceptable to the rulers of our
society, other culprits have to be located. Hence this

The above
characteristics provide a corrective to the constant drip of capitalist
celebration to the effect that the world we live in is the best imaginable. But
others, not simple capitalist apologists, claim that capitalist amounts to the
best achievable world and is far
better than any humanity has experienced before.

John
Lanchester in his book about the financial crisis, Whoops!,says he believes that western liberal democracies [all
capitalist after all] are best societies that have ever existed, “which is not
the same thing as saying they are perfect. Citizens of those societies are, on
aggregate, the most fortunate people who have ever lived.”

The
foundations of this belief will be examined in the next part. With capitalism,
does the good ultimately outweigh the bad?

Friday, 16 November 2012

2.6 billion
people are living on less than $2 a day, many major cities are surrounded by
sprawling slums of misery, carbon emissions are rising faster than they were in 1990, Arctic sea ice is melting more rapidly than anyone anticipated and
unemployment and poverty are rife in many countries. A list of bad things
happening in the world is not difficult to compile. But why are these
manifestations of present and future suffering the responsibility of the
economic system – capitalism – now predominant across the globe? Are they not,
as is commonly argued, regrettable but inevitable facets of life arising from
flawed human nature?

You can’t
persuasively criticise capitalism by waving your arms and saying how awful
things are. As Schweickart says, to be convincing you have to show a causal
connection between the structures that define capitalism and these bad
features. “A serious critique,” he writes in After Capitalism, “must show that these negative features would not
be present or would at least be far less prominent, if certain structural
elements of capitalism were altered and that
such alterations would not have other worse consequences.”

I want to
examine five such negative features of capitalism that Schweickart highlights
in his book. I will add a sixth. The features are examined from the point of
view of some living in a developed, democratic capitalist country. That’s not
intended to pass over the often far worse circumstances of poorer countries.
It’s simply what I know most about and have experience of.

I also want
to talk about the positives of capitalism. Why, beyond the quiescence of
careerism or powerlessness, it still commands a grudging adherence. I was going
to do that in this post but it would be too long, so it will appear in a
following post, shortly.

Here is Schweickart in debate (and he does, as the presenter says, have amazing eyebrows):

First, the
negatives.

1 Inequality

This
feature would not, perhaps, have occupied such a stellar position twenty years
ago. It was once believed that eventually everyone in the world would live like
a middle class American, says Schweickart. “No-one believes that now.” Now, not
even middle class Americans live like middle class Americans. In 1960, the US,
the average pay of chief executives compared to all workers was 42-1. In 2007
it was 344-1. At Walmart, the US’s
biggest employer, it’s 900-1. In the 1970s, Britain was one of the developed
world’s most equal countries, now it is one of the most unequal. Inequality
between rich and poor countries is even more extreme and worsening.

Capitalism
has always involved great economic inequality. After the Second World War this
characteristic was restrained, in western countries, by high taxation of wealth
and collective bargaining. But both those elements have waned.

Schweickart
asks a basic question. What’s wrong with inequality? Let all the children grow
tall and some taller than others, Margaret Thatcher used to say. A rising tide
lifts all boats was the mantra of the Right in the ‘80s and ‘90s. The trouble
is that the tide isn’t rising. It is, literally
rising, but not in a wealth sense. Wages have been stagnating in the US for 30 years and have been dropping in the UK
since 2003.

The
problem, says Schweickart, is that the structures that generate this inequality
also generate desperate poverty and compromise democracy. Great and
concentrated wealth at the top of society enables those that have it to skew
the political process in their interests.

But we can
add that inequality has two other effects. One is that, as the book The SpiritLevelshowed, problems, such as mental
ill-health, incarceration, obesity and violence, increase in intensity the more
unequal a society becomes. Secondly, inequality played a big part in causing
the economic paralysis afflicting the US
and Europe. A “wall of money” at the top of
society has been used for destructive speculation. While inadequate income in
society at large has both caused the crisis (the original credit crunch was
precipitated by Americans not being able to meet mortgage repayments) and made
exiting recession very difficult.

2 Democracy (lack thereof)

We, in the
West, have free elections and a choice of parties to vote for. If enough people
want to form anti-capitalist parties and seek votes, no-one will forcibly stop
them. In Francethey have them in name.
Therefore, we live in democracies.

Not so
fast. The formal accoutrements of (representative) democracy does not mean we
have democracy in content. Schweickart says we live in polyarchies.

A polyarchy
exists where a country has free elections and a multi-party system but one
class is dominant and its view and needs predominate. These views are propagated
through party funding, lobbying, and the use of think tanks that create and
mould public opinion.

But there
is a deeper reason for the constrained democracies we live in. That is the
formidable economic power of the owners of the economy and everyone else’s
material dependence on maintaining their confidence. “A capitalist economy is
ingenuously structured,” says Schweickart. “Almost everyone has an interest in
maintaining the spirits of its ruling class …. So long as the basic
institutions of capitalism remain in place, it is in the rational self-interest
of almost everyone to keep the capitalists happy.”

And when
the capitalists aren’t happy they can indicate their displeasure in very
powerful ways. In August 2012, UK Conservative chancellor George Osborne
reversed a £2 billion tax rise on the oil industry after companies responded to the rise by cutting production by 18%, and thus revenues to the UK Treasury.

The writer
Dan Hind has said the public is
only audible when it echoes governing assumptions. If people think unemployment
benefits are too high, they entrench government policy. But if they think tax
should not be cut for the rich, they are instantly mute.

Even at its
theoretical best, capitalist democracy only applies to the political system.
The economy can only be influenced indirectly. Under Schweickart’s plan for
worker controlled enterprises and social control of investment, democracy is
extended to the workplace.

3 Environmental Degradation

“Only a
madman or an economist could believe that exponential growth can go on forever
in a finite world,” so spoke the late economist Kenneth Boulding who is quoted
in After Capitalism. But capitalism
believes, if it 'believes' anything, just that.

This is the
inherent environmental flaw in capitalism. It grows. “Capitalism is enormously
productive,” says Schweickart. “Every year,
enormous quantities of commodities are produced that, when sold at anticipated
prices, generate enormous profits, a large fraction of which are reinvested
back into the economy in anticipation of still greater production and still
more profits.”

The ever increasing consumption
required by this process has been made possible in recent decades by consumer
borrowing. Of course, as we are painfully aware now, capitalism doesn’t
automatically grow and this tendency, in its environmental implications, will
be considered shortly. But the significant point is that capitalism is a system
without internal limits. In 2007, a British professor of engineeringworked out that, based
on an economy growing at three per cent a year, we would consume resources equivalent to all those we have consumed since the emergence of humanity by 2040.

This growth is manifested through
the gradual exhaustion of natural resources, the steady encroachment of
physical development into rural areas (happening now in the UK through the
erosion of the “green belt”), and the release toxic by-products of production
and consumption such as carbon emissions and nitrogen-based fertilisers used in
farming.

What would defenders of capitalism
say to the charge that the system is ecologically unsustainable? Firstly, and
very loudly I imagine, they would point out that the environmental record of
capitalism’s historical rival was terrible. Pollution under Communism was
chronic. In the early 1980s, northern Bohemia
in Communist Czechoslovakia had the worst air pollution in Europe.
By 1983, 35% of all Czech forests were dead or dying and one third of all Czech
watercourses were too polluted even for industrial use. Though the main
environmental bane of Communism, it should be said, was pollution, not growth.

Secondly, a pro-capitalist would argue that, through capitalism’s association with liberalism and free elections,
environmental activists can, externally,
bring capitalism under control and make environmentally destructive behaviours
unacceptable. Think of the film Erin Brockovich.

“Thanks to the efforts of
determined environmental activists in virtually every advanced capitalist
country, air quality is better now than it was two decades ago and rivers and
lakes are cleaner,” writes Schweickart. “Environmental protection laws have
been passed and “green” taxes and imposed in many countries.”

There are several points to make
in response to the belief that capitalism is compatible with a flourishing
environment. Firstly, environmental
activism can’t alter capitalism’s integral growth dynamic, it’s “grow or die”
impulse, as the social ecologist Murray Bookchin put it. As a result the best
environmentalism can do is ameliorate the worst effects. “Things getting worse
at a slower rate”, is how the late environmental activist, Donella Meadows,
described the situation.

Secondly, in the low or no growth
world we are entering, environmental priorities are being sacrificed to meet
the short-term need to revive growth. “We can’t be ambivalent about growth,” is
how the UK
government’s “planning” minister, Greg Clark, justified reducing regulations to
make it much easier to approve building development in the countryside.

Thirdly, many polluting practices
in western countries that have become culturally unacceptable have been
exported to poorer countries, where people have less power to make their objections
count.

Lastly, the experience of the 21st
century has shown that when environmental activism directly confronts huge
capitalist industries like oil, automobiles and mining, it does not win. The
1987 Montreal Protocol was the last successful international agreement to
change capitalist behaviour. The protocol called for strict restrictions on
chemicals that deplete the ozone layer (chlorofluorcarbons) and the results
have been impressive. But, says Schweickart, the industries affected had
substitutes to hand, and the protocol “should not lull us into thinking
capitalism can accommodate all sensible environmental solutions.”

With climate change and carbon
emissions it has been a very different story. There are cleaner ways of
generating energy than burning oil and cleaner way of transporting people than
using cars, says Schweickart. “But it is hard to envisage the transition to
these cleaner modes that preserves the status and income of these giant
industries,” he says.

But the problem goes deeper than
corporate resistance, he argues. Phasing out chlorofluorcarbons did not affect
consumption habits. “A transition away from carbon-based energy almost
certainly would”.

The consequence of the conflict
between environmental sanity and profit has been that many capitalist countries
– most notably the US
– have been unable to change course to ameliorate climate change. Not only
this, a political culture has developed that denies the existence of climate
change even when its effects become harder and harder to ignore.

This seemingly intractable problem
is intimately related to the fake democracy examined in section two. In a 2011 report, the head of Greenpeace International, Kumi Naidoo, said that governments don’t take action on climate change
because they have “captured” by corporations responsible for it.

“These polluting
corporations often exert their influence behind the scenes,” the report said,
“employing a variety of techniques, including using trade associations and
think tanks as front groups; confusing the public through climate denial or
advertising campaigns; making corporate political donations; as well as making
use of the "revolving door" between public servants and
carbon-intensive corporations.”

Finally, what of the prospect that
dysfunctional capitalism, an economic system that produces low or no growth,
may, in an unintended way, be beneficial to the environment? Less destructive
than a healthy capitalism that achieves growth of 3 or 4% a year. In 2009, because of the dramatic drop in economic
activity, carbon emissions fell for only the fourth time in 50 years.

Less destructive, perhaps, but not
less destructive enough. What western capitalist countries need, for ecological
sustainability, is de-growth, not spluttering growth or GDP flat-lining. They
need to reduce their consumption. And while growth proves elusive, politicians
obsess about its resuscitation. Thus, environmental considerations lose any priority
they possessed.

But equally significant is that a
dysfunctional capitalism not sustainable. It was the end of economic growth in
the 1980s and economic stagnation that doomed Soviet Communism. “If rich
countries cease to grow,” writes Schweickart, “their own economies will implode
– so will the economies of poor countries, increasing the level of poverty,
increasing the level of environmental degradation that poverty entails, and
decreasing the amount of funds available for environment damage control.”

Enough already

I realise this is enough for one
post. In part 2.2, I will consider three other basic features of capitalism:
Unemployment, overwork and instability.

In 1930, a very famous economist
predicted that, in 100 years, inhabitants the US
and Europe would work three hour days and
fifteen hour weeks. Their main
preoccupation would be how to occupy their abundant free time.

Friday, 9 November 2012

So the
American people will have four more years of “socialism”. However will they
cope? Some aren’t taking it well at all, such as Donald Trump who came over all
Benito Mussolini and called for a “March on Washington”. In the interest of historical
accuracy, it is only fair to point out that Benito Mussolini was actually
invited to march on Rome
in 1922 and bring to power the world’s first Fascist government.

Do you
feel, consciously or not, a sense of relief that Obama won? Do you suffer from
guilt about feeling relieved? Have I just hit upon a new psychological state –
relief guilt? Given the absurdly constricted nature of the choice, you can
debate endlessly whether it was right to vote for Obama or shun the whole
corporate charade. Some, like Noam Chomsky, have confronted that dilemma.

But, from
an international perspective, I don’t think voting or not voting is the main
problem. It’s fundamentally irrelevant. The enduring problem is that the
American Presidential election campaign puts out so many myths that possess a
stickiness that attaches them to the cultural landscape. Before you know it,
the elusive reality bird that you worked so hard to track down has flown away.

So here are
three myths that urgently need dispelling.

Myth 1

Laissez-faire bad/Government intervention good

Obama spent
$14 billion bailing out General Motors. Romney would have let the company go
bankrupt. Whether the latter is actually true is highly questionable given that
George W started the enormous bail out of corporate America. But the General Motors’
bail-out was presented as a victory against the ideological denseness of pure
laissez-faire and for the United Auto
Workers Union.

But it was
a strange kind of victory. Post bail-out, the UAW signed a deal with General Motors
in which, aside from its existing members getting a below the cost of living
pay “increase”, also ensured that new car workers would be hired at half the pay rate, $16 a hour, that
their predecessors received. This result of government intervention is not
good. It’s not loitering on the outskirts of good. It’s very bad.

The General
Motors bail-out exemplified 21st century government intervention in
which corporations are saved from their own mistakes through gifts of taxpayer
money, while their workers and customers get the discipline of free markets.
And this happens while the tax burden continues to be shifted away from
corporations and the rich and onto the shoulders of the majority.

Anti-austerity
but pro-capitalist economist Ha-Joon Changhas shown how General Motors’ failure was preceded by dabbling in every
conceivable corporate fad over the last 30 years – shareholder value, buying
other car firms and creating a highly profitable finance arm. But when it came
to the state saving the company from bankruptcy, “the US government”, says Chang, “deliberately
took shares that do not have voting rights (albeit priority in dividend
payouts) – so that it would not have any say in the management of the company.”

Chang has noted the same reticent government intervention in
Britain,
where the government has legally nationalised two large banks, but does not
control them."This is not even capitalism anymore," he says. “What is the point of owning a bank, when you have to negotiate hard, or
(one suspects) even beg, in order to set the pay of your employees or make it
lend more in the way you want?”

The
original bail-out of the banks was, in scale and expense, the supreme example
of “not laissez-faire” dwarfing all others. But was it a good thing? It saved
the economy from collapsing at the time and saved the banks at massive taxpayer
expense, transferring a large proportion of their debt to the public. This was
followed by a huge infusion of quantitative easing which they used to
recapitalise themselves. But they are still indebted. Bank of England Governor,
Mervyn Kingsaid recently that
advanced economies won’t be able to escape “their current predicament” without
more write-downs of debt by banks and more recapitalisation. So what began in
2008 is not over.

Just
possibly, in 2008, the banks should have received a classic dose of
laissez-faire and been allowed to go bust along with their debts. Then new public,
debt-free, banks could have been created, as suggested by, among others, Joseph
Stiglitz. The “pain” would have been more intense in the short-term but not
prolonged.

But our
governments “intervened” the make sure this didn’t happen and we are living with
the consequences.

Thomas
Frank quotes a line from the 1930s American socialist, Norman Thomas, in his
book, Pity the Billionaire. “There is no Socialism at all
about taking over all the banks which fell in Uncle Sam’s lap, putting them
back on their feet again, and turning them back to the bankers to see if they
can bring them once more to ruin.” But there’s quite a lot of capitalism about
it.

Myth 2

The middle class is the bedrock of a strong
economy, democracy etc

Obama
clothed his campaign in the need for a “strong middle class”. Romney vowed to
“protect the middle class”. But like the fabled word “community”, the larger the middle class looms in political rhetoric, the more it disappears
in reality.

According
to US census research, published in
September, the gap between rich and poor has widened to its highest level since
1967.“The gains from economic
growth in 2011 were quite unevenly shared as household income fell in the
middle and rose at the top,” said Robert Greenstein, President of the Center on
Budget and Policy Priorities, about the data. Average incomes fell for the
bottom 80% of earners and rose for the top 20%. The top 1% of households
experienced a 6% rise in income.

The income of the median American family is lower than it
was in 1998. In a 2011 article about the disappearing American middle class,
the US
journalist Paul Harris said, “I do not care if you are a Tea Party activist or
a Socialist party USA organiser, you should be able to agree on one thing, at least:
this is unsustainable. Something has to give. But no one in the current
political system looks like they have an answer.”

As far as the vanishing middle class in the US is
concerned, it’s plus ca change, no matter who lives in the White House.

Myth 3

“Equal Pay” is more
achievable under Obama than Romney

Ok, so maybe this myth is a bit of a cheat, but language
speaks volumes, if you’ll pardon the tautology. To keep referring to “equal
pay” in the context of contemporary America
and Britain
is akin to waxing lyrical about “human rights” in a Roman coliseum at lion
time. Pay in both countries is staggeringly unequal and getting worse. And neither Obama, nor Romney,
had he been elected, will do anything about it. Obama clearly didn’t in his
first four years, as the above census data shows. This is not meant to justify
any kind of gender pay discrimination or retarded Republican views on abortion
or contraception, but the “equal pay” mantra gives the impression of railing
against privilege when, in reality, it does nothing of the kind.

In order to even begin addressing pay inequality the debate
needs to move on from just talking taking about discrimination to understanding
and, acting upon, exploitation: the remuneration workers get in compensation
for their contribution to profit, the two elements of which are wildly out of
sync. This, in turn, needs to expand to look at who decides pay levels, and thus
the economic autocracy we live under will come gradually into focus. This is a
mammoth intellectual shift which, as the Presidential election campaign showed,
the political mainstream is incapable of making.

As the American writer Walter Benn Michaels has said, the
ostensible Left in the US is little more than the “human resources department of the right". It is, despite what Donald Trump believes, not dangerous to the status quo.

The Czech dissident and later head of state, Václav Havel, developed the
concept of “living in truth” as a means of defying the Communist regime in Czechoslovakia.
It entailed, in part, a refusal to accept the lies of official propaganda. It
is becoming a principle that is applicable to living in western, “democratic”
countries. Whether one votes or not.

Thursday, 1 November 2012

What
exactly is capitalism? That might appear a strange question to ask, fifty-plus
posts into a blog about, erm, capitalism. But if you’ll forgive the tardiness,
this is an inquiry that needs to be pressed.

While
capitalism is a noun that attracts adjectives in abundance (crony capitalism,
free-market capitalism, and now the oxymoronic humane capitalism), the noun
itself remains largely uninterrogated, an unexamined presence. Everyone is
supposed to understand what capitalism is – it’s all around them after all – but it’s
remarkable that something so taken for granted is seldom defined. I’m convinced
that many people who define themselves as anti-capitalist have only an
intuitive sense of what they are against.

Perhaps you
can be too close up to something to fully grasp it. Maybe you don’t really know
the people you’re closest to.

David Schweickart is an American mathematician and philosopher who published a book
in 2002 called After Capitalism.
Aside from elucidating an alternative to capitalism, he attempted to define it
and describe its consequences. After
Capitalism isn’t a howl of outrage against “the system” but a rational
effort to go beyond TINA (‘there is no alternative’)

Reviewing
Schweickart’s book is therefore a good way to look at capitalism in the cold
light of day: To examine what it is (which may be very different from how it is
commonly perceived) to look at its faults, to say what’s good about it and what
the alternatives to it are. There is, I believe, an unconscious and very
prevalent fear, that interfering too deeply in the workings of the mysterious
capitalist machine will lead either to the government controlling everything,
with lethal consequences for freedom, or, alternatively, plunge us into a
technological dark age and anarchistic chaos. Refusing to be awed or
intimidated by what is, after all, an economic system that humanity has
rejected for the vast majority of its history is a path to confronting those
fears. The review will be in three parts.

Here is Schweickart speaking (with others):

Say cheese! The C-word
in focus

Schweickart
gives a three part definition of capitalism. Firstly, he says, the bulk of the
means of production (offices, factories that produce goods and services) must
be privately owned, either by corporations or individuals. This was
traditionally called by the Left ‘private property’ which is unfortunate,
Schweickart says, because it implies that homes, cars and toothbrushes will all
be confiscated and “communalised” in any revolutionary change (think of John
Lennon’s Imagine). These things were,
to someone like Karl Marx, not ‘private property’ but ‘personal property’ and
would not be seized by anyone.

Secondly,
products are exchanged in a market. “Individual enterprises compete with
one another in providing goods and services to consumers, each enterprise
trying to make a profit,” says Schweickart. “This competition is the primary
determinant of prices.” The state owning all enterprises and deciding that to
produce by means of a plan, as in the old Soviet Union,
is not capitalism. Neither is it capitalism when the local community owns most
of the economy, as with social ecology.

But, says Schweickart, it is an “ideological distortion” to
use “market economy” as a synonym for capitalism. They are not the same thing.
Enterprises within a market economy can be organised differently. They can be
controlled by their workforce. This is significant because, when it comes to
imagining a “post-capitalist economy”, Schweickart says it will be populated by
worker-controlled firms operating in a “decentralized market economy,” a system
he calls “economic democracy”. This is contentious on several levels and I will
critically examine Schweickart’s proposals in Part Three.

Lastly, he says, capitalism, to be capitalism, has to be
based on wage labour. This means that most people, of working age, have to rent
themselves out to others, who own the “means of production”, in order to gain
the resources to survive and consume. “It is a crucial characteristic of the
institution of wage labour that the goods or services produced do not belong to
the workers who produce them,” says Schweickart, “but to those who supply the
workers with the means of production.”

It is this reliance on wage labour, says Schweickart, that
gives capitalism its susceptibility to crisis, its downturns and booms.
Economic health, under capitalism, is based on what Keynes called “effective
demand”: the purchasing power of the millions of wage labourers. But this
demand is formed from wages or salaries, the consequence of what is negotiated
from employers for whom wages are just another cost. If that happens, private
investors can lose confidence and companies do not spend the profits they have
amassed.

This, says Schweikart, is one of the “central
contradictions” of capitalism. An in-built conflict, you might say. “Wages are both a cost of production and an essential source
of effective demand,” says. “Capitalist firms are always interested in cutting
costs, expanding markets and developing new products. But to the extent that
the first of these goals, namely cost cutting, grows in importance relative to
the other two, effective consumer demand will tend to be depressed – and hence
also those “animal spirits” of investors. This can mean a stagnating economy
and rising unemployment, perhaps on a global scale.”

So, if most assets are privately owned, economic exchange
takes place in a market, and most people are wage labourers, a society is
capitalist.

But, within these parameters there are different kinds of
capitalism. The twentieth century had quite a varied palette of capitalisms. Post-war
Japan and later, South Korea, were examples of one version where the state
directed investment to certain favoured parts of the economy and had a bias
towards exports (a type of capitalism the economist Ha-Joon Chang is enamoured by). After the Second
World War, Western Europe and the US had for many years a form of
managed capitalism, based on collective bargaining and the state ownership of
some parts of the economy. West
Germany went in less for state ownership and
instead practiced ‘co-determination’ – workers were elected to company boards.
After 1980, this changed, especially in the US
and Britain,
in that trade unions were “zapped”
and much of what the state did was privatised.

Perhaps this is just an extreme manifestation of a state of
affairs that was there all along. “I watched with incredulity as businessmen ran to the government in
every crisis, whining for handouts or protection from the very competition that
has made this system productive,” wrote one William Sutton, Treasury secretary
under US President Richard Nixon in the 1970s.

The point
is that real-world capitalism can, and invariably does, radically depart from the
textbook “free market” model, but it’s
still capitalism.

Love me, I’m a wealth
creator

We can see
from this definition there is one conspicuous absentee – the “entrepreneur”. In
conventional justifications of capitalism, the entrepreneur looms very large
indeed, especially during economically tough times. In fact, in conventional
explanations, the entrepreneur is capitalism.
In the UK,
Conservative business minister, Michael Fallon, says we should salute entrepreneurs as “Olympic Champions”
who deserve adulation for creating wealth and jobs.

But
conservatives are not alone in celebrating the entrepreneur. The left-wing
economist Stewart Lansley, author of The
Cost of Inequality, differentiates between the deserving and undeserving
rich. One of his favourite examples is the industrial designer, James Dyson,
who merits his wealth, says Lansley, in contrast to someone like Philip Green
who makes money from taking over existing businesses. Dyson creates wealth,
says Lansley, but Green merely transfers it to himself.

But Schweickart
says both these understandings are ideological distortions. He does not deny
that entrepreneurs exist or they merit a reward for their contribution, although
frequently they merely copy what has gone before (new coffee shop anyone?) Any
society needs people who invent new products or technologies. But what
Schweickart does deny is that entrepreneurs are capitalists.

From Marx, Schweickart gets the insight that all wealth derives from
labour. “As any economist will confirm,” he
says, “unless labour costs are less than the value added by labour, there will
be no profit.” So entrepreneurs create something and ethically are entitled to
a reward. Workers literally produce goods and services. Managers supervise
production. They all contribute something.

But what
do capitalists do? The answer, says Schweickart, is very little. They have an
entirely passive role. They watch
their wealth compound by virtue of the fact that they have quite a lot in the
first place. “In a capitalist society, enormous sums are paid to people who do
not engage in any entrepreneurial activity or take any significant risk with their
capital,” he writes.

As an
example consider the National Express Group, which operates buses and trains in
the UK.
The major shareholders in, and therefore owners of, National Express are the
Cosmen family, a Spanish family who “first entered the transport industry, in a horse-and-carriage operation, in 1728”,
a hedge fund called Elliot Partners who very persistently pursue very high
returns for the immensely rich people who invest in the hedge fund and an
investment company called M&G. None of these investors are entrepreneurs.

We are
now in the ideological belly of the beast. An entire economic system is
justified by virtue of its vital role in creating wealth when it is primarily
about the receiving of wealth by a small minority that other people create.

To be a
capitalist, says Schweickart, you must own enough productive assets to be able
to live comfortably on the income they generate. In the US, he says,
and he wrote this in 2002, this comprises about one per cent of the population.
Sound familiar?

The investment
game

So why
does putting money in the capitalist investment game, in normal times, yield
results? Why do stock markets, bond markets, investment banks and currency
markets produce positive returns? Most pensions are invested on the stock
market and charitable foundations derive their income for grants from
endowments in shares. “One gets something for nothing because someone else gets
nothing for something,” explains Schweickart. “Investment income, the reward to
those who have “risked” their money by channeling into financial institutions …
is possible only because those who
produce the goods and services of society are paid less than their productive
contribution. If capitalist distribution were really in accord with the
principle of contribution (as is often claimed), the investor would get
nothing.”

Two
things follow from this. One is that share dividends are, in Schweickart’s
words, “a tax on enterprise” and should be abolished and replaced with a
capital assets tax. The second is that the real problem is not the stupendous
consumption of the very rich but what they do with the money they don’t
consume, the money they invest. Control of investment should pass from the
capitalist class to society as a whole. He calls it “social control of
investment”. I will look at this in detail in part 3.

In the
next part, I will examine Schweickart’s take on how far the problems of
society, such as environmental degradation, a hollow democracy and poverty, can
be laid at capitalism’s door. But I also want to look at the appeal of
capitalism and why people are so scared of moving beyond it.

“Most
workers, especially those in rich countries, have far more to lose now than
just their chains.”

About Me

Capitalism is not beautiful, said John Maynard Keynes. It is not intelligent, it is not virtuous and it not just. “But when we wonder what to put in its place, we are extremely perplexed.”
This blog is about the ideologies that mask the ugliness and injustice beneath the surface. And how our perplexity might be diminished.
You can contact me at idealogically@gmail.com